Ding dong! It’s your FedEx delivery with a message: The economy might be worse than you thought.

FedEx (FDX), which is often considered to be a bellwether for economic growth and consumer demand, plummeted 15.23% today after a disappointing earnings report on Thursday.

• The company reported a profit of $790 million, down from $1.08 billion in the same quarter last year.
• Revenue came in at $21.6 billion, slightly missing Wall Street expectations of $21.9 billion.
• FedEx cut its full-year guidance, and now expects earnings of between $17.90 and $18.90 for fiscal 2025, lower than its previous guidance of between $18.25 and $20.25.
• FedEx’s new Federal Express network, which merged FedEx Ground and FedEx back in June, reported declining operating results.

The company said most of the slowdown was from a decline in businesses shipping to other businesses, as opposed to individual shoppers. But regardless of the reason, FedEx’s tough quarter spooked investors. After all, they were just reassured by Federal Reserve Chair Jerome Powell that the economy was “in good shape,” even as the central bank cut rates by more than many economists expected.

During the shipping giant’s earnings call, FedEx CEO Raj Subramaniam acknowledged that the Fed’s bigger cut reflected a “weakness in the current environment,” suggesting that FedEx’s poor earnings were due to the larger macro backdrop. Subramaniam added that the company isn’t expecting “a significant comeback on the industrial environment in the rest of this (calendar year).”

Is this a chance to buy low?

Subramaniam noted that he is “cautiously optimistic” that production will ramp up again early next year. He also explained that the company is going to implement cost-cutting measures to get FedEx back on track—something Subramaniam has been focused on since he became the company’s second-ever CEO in 2022, taking over for founder Frederick Smith.

Despite the earnings meltdown, more analysts still have a “buy” rating on FedEx than any other rating, and shares were up 21% year to date before today’s drop.

But if the broader economic situation is really responsible for this quarter’s poor results, it could continue to drag shares down in the months ahead. Only time will tell if FedEx can deliver better results.—LB

We’ve all heard it before: “We’re living in unprecedented times.” (Some precedented times wouldn’t hurt, TBH.)

There are folks who believe this is an exceptional time filled with powerful mazes and groundbreaking questions, while others are in the camp that everything has happened before in some way.

The question persists: What in the world is going on in the world? Interesting Times, a new series by NYSE, aims to find out.

This series explores what makes the present moment so exceptional. For example, in a recent episode, independent technology analyst Benedict Evans shares his view on the newest tech and what he thinks is the fallibility of predicting the future.

Check out the whole series here, and get some real insight into why these are—yes—interesting times to be an investor.

🟢 What’s up

• Nike popped 6.84% once CEO John Donahoe announced he will step down after four years on the job. Turns out when they say “Just do it,” “it” means resigning in disgrace after tarnishing an iconic brand.
• Intel rose 3.31% on the news that Qualcomm approached the company with a buyout offer. Qualcomm sank 2.87% on the revelation.
• Constellation Energy are the geniuses behind turning Three Mile Island back on, which shareholders love—the stock soared 22.29% today.
• Vistra jumped 16.60% on the news that the Texas-based utilities provider is acquiring the remaining 15% stake of its subsidiary Vistra Vision that it doesn’t already own.

What’s down

• UPS sank 2.67% after FedEx announced poor quarterly results and cut its earnings forecast.
• Lennar fell 5.33% in spite of beating earnings estimates last quarter. The problem is that shareholders don’t like the homebuilder’s forecast of no growth next quarter.
• Chewy tumbled 4.34% on the news that the pet products retailer will kick off an underwritten offering of $500 million of shares from a private equity partner, and buy back $300 million in shares—effectively reducing the company’s private equity ownership stake.
• Novo Nordisk dipped 5.46% after the pharmaceutical giant announced mixed results from the latest trial of a new weight-loss drug.
• ASML declined 3.97% thanks to a downgrade by Morgan Stanley analysts citing a slowdown in demand across the semiconductor industry.
• Trump Media & Technology Group continued to fall today, dropping another 7.82% now that the early investor lockup period has concluded.

We knew interest rate cuts would help the housing market, but we didn’t know it’d happen this quickly.

As we’ve noted before, the Federal Reserve’s decision to lower interest rates will have several knock-on effects—one of which is that it should force mortgage rates lower. That’s great news for homebuyers who’ve been locked out of a stagnant housing market by both high prices and by homeowners who are loath to give up the low rates they locked in years ago.

Yesterday, mortgage rates dropped to 6.09%—their lowest point since February 2023, and dramatically below the 20-year high of 7.79% they hit last November.

Lower mortgage rates won’t fix the housing crisis instantaneously—there’s still a housing shortage to contend with, and prices for a new home remain near all-time highs. But make no mistake: This is a good sign for homebuyers across the country.

The Federal Reserve’s 50 basis point rate cut on Wednesday was like Christmas morning for investors, and all major indexes skyrocketed this week.

People are celebrating for good reason. Lower rates stimulate economic growth, which should lead to stronger profits across the market. Not to mention the fact that, at least for now, it looks like Fed Chair Jerome Powell achieved the coveted soft landing—meaning that the central bank managed to curb inflation without triggering a recession.

But investors buying with blind excitement haven’t been particularly picky: 350 of the 500 companies on the S&P 500 have jumped since the rate cut. Many of the biggest winners this week include old tech favorites like Tesla, Apple, and Nvidia—but they may not be the biggest winners in the long run.

How to play this moment

While many economists see the Fed’s rate cut path as being broadly bullish for stocks, investors should be wary of jumping on a jittery bandwagon. After all, many of the same analysts who argue equities will gain because of lower rates still warn of volatility in the coming weeks and months ahead, especially amid a contentious presidential election.

And while Powell's speech struck an optimistic and confident tone, it’s important to remember that a larger rate cut indicates the central bank does see cracks in the economy—most notably in the slowing labor market.

Bank of America strategist Michael Hartnett went as far as advising investors to turn to commodities, bonds, and international stocks given that the US equity rally could be turning into a “bubble.”

The good news? A low rate environment is still ripe with opportunities.

Small caps, for example, usually bounce after rate cuts because they often carry more debt and therefore are more responsive to lower borrowing costs. It’s no wonder, then, that investors have sent the Russell 2000 index soaring this week.

According to data from the Wells Fargo Investment Institute cited by Fortune, consumer discretionary, tech, and healthcare stocks tend to be some of the biggest gainers during rate cutting periods.

Chief Investment Officer of Morgan Stanley Mike Wilson reiterated in a recent note that defensive picks such as utilities are set up well to grab some of the gains in the next year.

So, while the current “everything rally” is likely a temporary reaction to this week’s big news, the advent of rate cuts signals a change in markets that discerning investors can take advantage of.—LB

Setting a precedent. These are some unprecedented times we’re living in, and unprecedented times call for a deeper look. That’s why NYSE created a video series that explores the current state of our world. Take a recent episode that features a chat with an investor about how AI is evolving our capabilities. Tune in.

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• Attention Bills Mafia: Erie County, NY, is selling bonds to finance the construction of a new Buffalo Bills stadium, and anyone with $5,000 can buy in.
• Lithium is an essential component to creating everything from batteries to EVs, but high demand has been outpaced by even higher supply.
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With all eyes on the Fed this week, we can finally turn our attention elsewhere next week—and there’s plenty to see.

Monday brings us both the manufacturing and the services PMI reports, Tuesday delivers the S&P Case-Shiller Home Price Index, Wednesday is more housing with new home sales, and Thursday we’ll get initial jobless claims and pending home sales.

Then on Friday we’ll get what was once the all-important Personal Consumption Expenditures Price Index, or PCE. While this is the Fed’s favorite report for tracking inflation, with the arrival of rate cuts and the shift of the Fed’s focus to the labor market, suddenly PCE doesn’t have the same heft it once did. Still, Jerome Powell & Co. will continue to pay attention to this report in order to inform the pace and size of future rate cuts, so you shouldn’t dismiss it out of hand.

As for earnings, things really slow down next week:

Tuesday: Autozone, Stitch Fix, KB Home

Wednesday: Micron Technology

Thursday: Accenture PLC, CarMax, Costco, Vail Resorts, BlackBerry